Palmer claims Citic owes $12m

Clive Palmer on Sino Iron..‘‘We’ve sent them notices of default, we’ve sent them warnings.’’
Photo: Glenn Hunt

by
Peter Ker

Queensland billionaire
Clive Palmer
said his attempt to liquidate the Australian subsidiary of his estranged business partner is related to ‘‘more than $12 million’’ worth of administration costs.

In claims that continue to be vigorously denied by Chinese company
Citic Pacific
, Mr Palmer said Citic’s local subsidiary Sino Iron had ceased paying him ‘‘normal administrative costs’’ that had been paid without issue to date.

‘‘We’ve sent them notices of default, we’ve sent them warnings,’’ he said.

Mr Palmer claimed the money was three to four months overdue and amounted to more than $12 million.

The 2006 contract that Mr Palmer struck with Citic for the trouble-plagued magnetite project does not contain a reference to ‘‘administrative costs’’.

The liquidation attempt was lodged in the Western Australian register of the Federal Court on Friday, and became public after Mr Palmer’s company Mineralogy published a press release late on Friday that did not specify the amount of money that was allegedly overdue, and nor the exact contractual details of that overdue money.

Speaking on Sunday, Mr Palmer added that he had been forced to dismiss several workers from his mining projects in recent weeks.

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‘‘We categorically reject Mineralogy’s latest claims and will vigorously defend our legal position, in the interests of the project, the company and our shareholders,’’ a Citic spokesman said in a statement.

‘‘During the past year, there have been several attempts by Mineralogy to have the project suspended or terminated. All have failed before the courts.’’

Friday’s liquidation application ended a difficult week for Citic, which lost a court case to Mr Palmer on Wednesday over control of security at the port through which magnetite is exported.

Those battles came after Citic’s former chief financial officer Simon Chui Wing Nin was jailed on Tuesday in Hong Kong after pleaded guilty to insider trading.

Mr Chui was being trialled for the second time, and his charges related to trades he made in 2008 in response to an exposure Citic had to the Australian Dollar.

He was jailed for nine months, banned from being a company director in Hong Kong for three years, and fined.

Mr Palmer was elected to the House of Representatives last year after winning the federal seat of Fairfax.